>> thank you, guys. [applause] washington journal continues. >> host: each week in december of the washington we take a look at how your money is at work in

different the program. this we can wake of the general motors layoff announcement from two weeks ago we talked about the history of the federal governments support for thehe automobile industry. join us is david shepardson is with writers, , spent 20 years with detroit news. start by taking us back ten years ago to 2008. give us a sense of how much the federal government helped gm and automobile industry during the bill out and what strings we attached when we did that. >> guest: in the fall of 2008 gm was running out of of cash and so they went to the obama or the bushes administration and said if we don't get some sort of emergency assistance we might have to close our doors but in a 2008. that led to another man's with all three companies initially trying to tap this energy loan program come basically the green energy program designed to help

companies make more fuel efficient vehicles. that didn't work. the companies came to private jets, a huge controversy and then they were brought back for second round of hearings. congress in congress opted to do nothing. president bush stepped in on his own and gave the companies using tarp the $700 troubled asset relief program direct assistance to gm, chrysler and to the finance companies, gmac, ally financial and chrysler financial. the money m was dispersed over both the bush and obama administration's. when the conditions the obama administration required was both gmac i should go through bankruptcy part of that the administration forced the marriage of fiat chrysler the italian auto company to control of question but had to meet benchmarks to get certain%

stakes sticks of ownership in the o company. the biggest issue was in order to do this very fast restructuring it required that taxpayers to swap big chunks especially in the use of gm the loans for stock in the new company. the government came in with a huge amount of cash and said to the bankruptcy court, either agree to our deal, we will buy the company in essence, taxpayers will bite and we will basically did what creditors would pay because with so much money. u.s. tax biscay gm about $50 billion. canadian taxpayers about $10 billion. of that money taxpayers recovered about 40 billion. that's because the stock when taxpayers sold it was not worth as much as what taxpayers were owed. >> host: when did we sell that stock? do we still own any of that stock? >> guest: it took several years that was not until gm come

first gm had an ipo and the government ended up selling out later in the obama administration, took silver use because policy officials were deciding should we wait to try to see if the stock went up high enough or should we sell and basically eliminate the risk and let gm operate on its own. >> host: you mention a lot of numbers. this from the treasury department, the federal government is investing $51 billion in gm recouping $39 billion when all that stock was sold off. chrysler 12.5as reinvested, 11.2 very returned. on what promises specifically did gm make to the united states government when they took this money? >> guest: they didn't have to make that many promises because the idea if he talked to steve

ratner, former auto team at the obama administration is they wanted to make this company financially viable again. they did commit to building a fuel-efficient vehicle that got certain miles per gallon but by and large they did. not attempt to make any specific requirements like keeping the plantui open or keeping a number of workers. the governments aim was to move them outside of government control. they did want to do what happens in europe were a lot of european governments like germany, the state owns a big chunk of volkswagen. they wanted this company goes back to private sector relatively soon. >> host: having this conversation about this history two weeks after jim announced those layoffs come some 15,000 factory and white-collar jobs gm cutting in the next year or so. if you want to join the conversation, phone lines different, eastern/central time zones it is 202-748-8200. mountain/pacific time zones

202-748-8201. 202-748-8201. especially for those who work in automobile f industry. you can join us on that line. that 2008. bring us to the ongoing support for the federal government has automobile industry. a story in today's "washington times" talks about the tax credits that gm is concerned ask the federal government for. what are these tax credits? >> guest: during the obama administration congress approved the $7500 tax credit as part of the stimulus. that gives electric vehicle buyers a credit as long as a battery pack a certain size. once manufactured hits 200,000 unit sales, the following code starts to phase out over the next 12 months. castle hit that number in july. it's phaseout will begin januar. that credit will be cut in half for w tesla buyers to 30 $3750. jean expect it that 200,000

eagle cap by the t industry. that would begin their phaseout sometimear early 2019, completey phasing out sometime in 2020. they have been lobbying heavily for up to close to hear for congress to extend the cap, listed in part because they are worried and the point of the countries where the credits have gone down and they fall off of electric vehicle sales. the other companies with the exception of nissan are not close to enoughh cap. there's a split in industry as to whether it makes sense to give in the short term a big benefit to gm and tesla that could help the whole industry. >> host: after the gm job announcement when the president said in am twig were looking at cutting gym subsidies, his criticism after the nets is custom this is what he's talking about? >> guest: perhaps. there's one of the potential. there's a big debate you saw on

the whole fuel efficiency standards. during the obama administration itbi was doubled to about 50 mis per gallon by 2025. the trump administration has proposed freezing though standards the 2020, reversing the obama administration's hikes in the last five years. part of what gms has four and other companies is electric vehicle credits. if you produce ev you could credit towards meeting those requirements. currently in the proposalre they've been eliminated that gm of the compass are pushing for them. refer to different stores. it could bepa that because the only thing the compensation can do is veto or oppose congress lifting thest cap. existing cap is part of federal law that can't touch it. from what talked about federal government support for the automobile industry. david shepardson is one of the best tax and easy to ask about auto policy. here to answer questions, john is a first in illinois. good morning. >> caller: yes. thanks for taking my call.

volt owner. both my children are chevy cruz only you are planning on limiting both of those cars and all the money that the federal government has given to the gm, i feel have an obligation to continue these products. in the past 2008 they got into trouble because they didn't have the smaller cars. they were allhe on larger vehicles. they were considerably smaller vehicles. the government should put pressure on to continue them. that's my thought. >> host: talk about the bolt and the chevy cruz. >> guest: you're right. gm is getting rid of a big number of cars, the bolt which is been not -- and will keep the bulk of the fully electric vehicle and increase investment but gm is still losing money. electric fields are expensive, still not soluble outside of california and a few other

places. it is a concern that if oil prices spike when we see a shift back like in 2007-eight people were rushing to give dealershis getting rid of the suvs and buying cars. over the last five years five years ago about 50% 50% of all vehicles sold in the u.s. were cars. last month it was 30%. people are shifting away from cars and the u.s. can still make money on those and that's when the reasons you seen the the move away. it is a risk if oil prices up again. >> host: ohio, danny, good morning. >> caller: i'm not too far from detroit city and a member when detroit whisking. when detroit whisking with people like to lower-income people like lee iacocca, people like shelby. they made cars. they made cars and americans wanted. and we had the oil crisis of the 1970s and people started going

to more 1 fuel-efficient cars le the japanese cars. america's problem was we never could get it. that's not in our dna to our dna is to make the best cars. we invented the carpet we know it the best, and i support the president on slapping tariffs on cars because when we sent our cars there they slap heavy duties on them. a lot of times they don't on our country basic for free. i just want to say that. i think detroit needs to get back to making cars the way they used to make them. >> guest: during the auto bailout in 2008 president obama turned one of his advisors and said why can't chrysler engine build a toyota corolla? basically the same point you're making that u.s. companies historically not made a competitive small car. what do they do well? pickup trucks and suvs and the next huge profits on those

vehicles, ten, $20,000 depending on depending on how fancy those vehicles are. yes, the u.s. companies have not been competitive although in the '80s the u.s. did have like the ford escort, they were more competitive vehicles in part the whole market was shifted more towards cars. realistically a u.s. has put a lot of money and lots of your scars are very nice cars. they dore well relative to the japanese and the german companies doing cars but realistically they don't sell as well. u.s. companies decided let's put our resources in the vehicles that we think people want and we can make money on. >> host: that was danny from ohio. speaking of file, democrat tim ryan in the days after the gym and us but house for critical of the job cuts. here's a bit of what he had to say. >> when you have a company many years ago that gets a rescue

package from the taxpayers in the unitedro states, many years later, last year they got $157 million and a tax cut that we were told was going to be spent for workers in factories and jobs in the heartland, and turn around and cut 14,000 jobs and their stock price goes up 6%, that is a broken economic system that we have in the united states of america. >> host: tim ryan on the house floor two weeks ago. talk about tax reform and what it meant for a gm and what gm sd it was going to do from tax reform. >> guest: so the tax numbers are not huge for gm. in part because when gm was in bankruptcy was allowed by the treasury to keep net operating losses. the old gm which gm, the new gm was formed from the minutes of,

they were able to keep those. so the tax issue is not a huge issue. i know that figure is evaluation of gm's tax liability in the reports but is not a big number. this is a comment that third-quarter made $2.5 billion in profits. $150 million for coverage hundred $50 million for coverage that is revenue nor the $151 a a year, not a big thing to panic. gm ever said if we get the corporate tax cuts we will add more jobs. but look what tim ryan and all the numbers, senator portman, this is a- bipartisan anchor. maybe what caught gm by surprise was a level of anger towards the company. there is a lot of as tim ryan told me, rethink the bandit of the bailout. >> host: why was mary boris surprised by that? >> guest: i think because gm position this as we had to do this. these are cars not silly. from a business standpoint gm thinks this makes sense.

we are, that ship, the plant congressman ryan in lordstown lost its first shift. they lost another shift earlier this year. it's a bad one ship it gets lost 3000 workers. it's barely running. same with some of these other place as the man for small cars is going down. remember events of gm is you close the plant and stop building the chevy cruz, that allows you to get rid of all the engineers and the salary people work on the next generation. a big part of the job cuts are cutting 8000 salaried jobs most of them in the detroit area that are working on these cars that are going away. >> host: we do have especially for those in the automobile industry. phone lines as usual. kenny is just outside d.c.,

laurel, maryland, go ahead. >> caller: i am truly very close to baltimore county which is where gina has one of the plants to be closed. a few years ago back in 2008 gm was pretty much known from general motors to government motors. i'm happy to see the government has sold all the shares they owned in the company but it seems like in the near future gm might bear coming back to the taxpayers for more relief. my question is do you think there's an appetite for any additional relief or aid to the auto industry? not just gm and ford and the other companies, chrysler. with this president and this congress is in appetite for any future relief or financial relief for aid to these

companies? >> guest: i don't think there'ss any chance in the short term the companies will ask for aid or receive aid.mp as a make and gma 2.5 billion profits and third quarter. the auto companies generally are gm, ford and chrysler are all making money right now. this is about the long-term. if you listen to the auto companies they say the industry is on the precipice in the next few years of a historic shift away from the internal combustion engine toward autonomous vehicles owned by cheering. this is about preparing the company for that. there's also the chance of a recession, auto sales declining to use sales are very strong, about 7 billion vehicles a year in 2009 after the collapse. in 2008 the u.s. sold about 10 million vehicles. there's been there's been a steady wrapup of auto sales. in the short term -- it's hard

to say no to the auto industry. why? because the auto industry despite all the anger towards it provides a lot of jobs. not just the auto plants. it's also the supplies, the placesssion plants, the near the factories. throughout the world when auto companies get in trouble or what money, oftentimes government unwilling to do. one example, the baltimore plant the caller talked about. why did you build that? the tax peers gave gm $105 million to make grant from the energy department to build that plant. it's rare a private business gets upwards of $100 million to build a plant that it ultimate ends up closing the fuse later. >> host: i want to come back to one of the charge talking about with the federal government invested in gm and what recouped. 51 per dose with the investment over the course of the bailout. $39 billion is what the government recouped. did we sell to early?

could we recoup the whole thing? >> guest: it's always hard because remember the exact price now but the breakeven price even today is below what the taxpayers would've been -- taxpayers would've been getting dividends every quarter and so i don't know if you can puke it all and over the last ten years of the taxpayers would have been made whole. they would've lost less than 11 billion. >> host: was anybody pushing the federal can to stay in longer on that always idea to get out as quick as possible? >> guest: i remember during the 2012 campaign i invited negron and he said he wanted to share self-assuredness is possible. he said he felt one of the reasons the obama administration was the length was it was a campaign issue. it was a loss on paper, not a book lost until the taxpayers sold their shares. if i recall, the end of 2012 after the election taxpayers sold the final shares.

realistically, given where the prices were, in the short term we were not going to recover all the money. >> host: tom, good morning. >> caller: good morning gentlemen. i love c-span. i've got out and should expect a both of my family. my mothers side, my father's side. we go to michigan every some and i have watched this for the last 30 years where it just seems like there's not a lot of creativity coming out of detroit when it comes to cars. they are good with the big trucks and they are just not very creative when it comes to capturing peoples imagination or romance with vehicles. there's a place called the gilmore auto museum, the biggest car museum in north america. we went there with her kids a couple years ago and went to this place and have giant building full of lincoln's and

cadillacs. i got to talking to the sky and i said why don't they take these old designs and put them on a modern frame and have them get decent mileage? i would buy one. i would buy one tomorrow but they keep making these ugly cars. on top of that now they're pushing that it want to have gd mileage. it's like what, do they just think we are stupid? i'll listen for the comment. >> guest: i say what's the best-selling car in america? the toyota camry. .. that said, if you put an impala

next to a nissan altima next to a toyota camry, you strip the badges off, these cars basically look the same. they are very, very similar. some small design cues. a lot of it is what's under the hood, perceived reliability, what people think of the brand. i don't necessarily think it's about the fact that gm, it's the cars are not exciting. companies have tried to make the styling more bold and aggressive and so on, which is not what you might normally think about in your toyota corolla or commuter car, but that said, you have a low profit margin on these cars and remember, even the japanese companies, what have they done? they had to raise incentives to get people to keep buying small cars. tak as the industry shifts away from cars, it's harder for the companies to sell cars. yes, gm is trying. the cadillac is an example, you have more fancy styling. it's also a lot more expensive.

if you have money, in luxury cars, there's a little more fun. we will never be back to the era of 1960s and the huge fins and the cars that got eight miles per hour. host: barry is in new hampshire. go ahead. caller: good morning. i would just like to say one of the factors is the fit and finish and quality is so much better on the european and asian vehicles. that's one thing. with a chevy cruze, i looked at the cruze, i thought about buying it, i would have bought it if they had a wagon. they make a wagon version of the cruze in europe but there's no all wheel drive. of course, the wagon is not available here. this year i think it's nissan altima has come out with all wheel drive. none of the chevy sedans had all wheel drive available and there are no more station wagons which is an alternative to the suv. i'm presently driving a volvo

v-60 with front wheel drive. i prefer the all wheel drive. but the fit and finish, the ergonomics, the volvo lacks a few things in ergonomics that i complain about but generally speaking, when you sit in a car like a volvo or volkswagen or one of the japanese products, the interior is so much better done than the american cars. the american manufacturers have just been out to lunch. i will leave it at that. it's sad, it's unfortunate. i don't yearn for the days of '60s and '70s american cars because they were junky. that's why the japanese and germans basically took over. for the last 14 years i have driven two volkswagen w-8, aeigt cylinder. they were expensive to maintain but they were a dream to drive. guest: american companies definitely realize there's a huge problem, a lot of the interiors were not up to the

same quality as some of the others. i think they have improved those quite a bit. in terms of fit and finish, if you look at "consumer reports" the germans don't necessarily do as well as perceived but i do think brand perception lags reality. the gm brand, you typically, it scores relatively high in these surveys. another example is at thtesla's and finish is probably one of the poorest in the industry, yet their brand perception is a lot better than some of these u.s. companies. all the companies, the vehicles have gotten much better, but you got to walk through the dealerships, look at all the different vehicles. generally the quality, because it's so competitive, of all the vehicles got so much better. host: jeff is waiting in clifton, new jersey. go ahead. caller: thank you for taking my call, c-span. my question is why don't we hold the shareholders responsible when a company goes into default

like gm is, instead of the american people bailing them out? the board, the ceos, if they had a little more to say in it instead of taking their dividends, maybe we would get better products. guest: you are exactly right. here's what happened in the bailout in 2008. the shareholders got wiped out. the bond holders took a big haircut and the obama administration fired rick wagner, the ceo. most of the board was replaced and the executives got a two-thirds haircut from the value of their pensions. >> welcome to us hosting an important dialogue today on the future of the united states peace corps. as many of you know in this room, hundreds of thousands of americans have served as peace corps volunteers over the last six decades. they've changed lives, built lifelong friendships and i would argue mosim